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    Unit 9: Managing and Running a Small Business, LSST


    Management can be define as a process of controlling all business activities as well as people with in an organisation in an effective manner. Through this, company are capable to achieve goals and objectives in limited period of time appropriate ways thus help to gain long run sustainability at market place. In this report select Ashtons in order to analysis small business management effectively. It was established in the year of 2005 by Steve, Kristian, Sam and Ben. Ashtons is a estate company which are provide facilities related to house rent, buy, sell and many more other services (Burns, 2016). Through this, they are provide high class services with innovative ideas which help to build positive brand image in client's mind appropriately. In this assignment covers main consideration of small enterprise need to address allocating and planning resources and evaluate different process of buyers relationship management. It also includes small business develop transactionally benefits and drawbacks.

    Task 1

    P1 Consideration of small and social business to achieve objectives

    Ashtons is a estate organisation which are completing around 1000 transaction its includes residential sales as well as letting, land acquisitions and new houses. Management of the company has develop strategies related to training program which enhance workers professional skills and experience as well as offer them financial help when employees needed. Through this, organisation are able to manage, control all staff members that help to achieve goals and long term sustainability (Crane and Matten, 2016). Administration of the company has implemented innovative ideas at work place to produce high quality differentiated goods and services thus provide competitive benefits as compare to their competitors in the same industry. There are few assessments which are defined as follows:

    Assessment of planning resources

    As an employer, it is a responsibility to deliver the desired work to assessing the task requirement and projects deadlines. Few assessments are required to manage and organise functions operations of small scale businesses.

    Employees and skills: Within organisations, satisfied and skilled employee is very important to run enterprise activities effectively in long run. So that, management has develop action plan to enhance workers performance, productivity and achieve their target in limited period of time. It is one of the most important resources for any firm which are divided according to role, responsibilities at work place.

    Assessing the business plans

    Evaluation of objectives and key requirements of business helps to set the aim and objectives of business. It can be determined as follows;

    Vision, mission, goals and objectives: Owner of the company has set vision, mission and management has develop short or long term goals as well as objectives. Through this activities, they know the path through which whole business activities should be done effectively and organisation can achieve their mission appropriately. Enterprise development and success are highly depend on these things for working hard to achieve them in given time frame.

    Assessment of financial requirement

    Financial resources: In current market environment, there are several kind of financial resources which are available according to the need of company. Companies needs to select most appropriate method to arrange fund that help to run entire enterprise activities significantly (Donnelly and et. al., 2015). Some important sources of fund are banks loan, angel investors, financial institutions, over draft and many more.

    M1 Several tools and techniques in structured ways to plan resources

    Management of Ashtons has used two method Gantt charts and Critical path analysis of project management techniques in order to allocating resources in appropriate ways which help to run business activities effectively. These both tools are explain as follows:

    Gantt Chart: In this process firm are analysis time period of completion of project activities. Each task has assigned with time according to requirement of work and make full project plan to run entire program effectively. Through this firm are able to achieve goals in limited period of time thus help to build strong brand image at market place.

    Critical path analysis: Project manager has used critical path technique to find out most best suitable path for completing program. In this, they analyse shortest path to completing each task in given time frame appropriately, by which organisation are capable to complete work on time and take advantage of save time, money, efforts and other resources (Frese, Hass and Friedrich, 2016). By implementing this strategies enterprise are optimum utilise available resources that help to gain economic of scale.

    M2 Importance of allocating and planning resources

    It is a very important process in which management of the company has allocating resources to each one department, division, employees, manager and many more according to their role, responsibilities, capabilities, skills etc. Through this, they are able provide motivation, increase self confidence, enhance moral, empower etc. to their employees that help to achieve goals and objectives in limited period of time.

    D1 Critical analysis the application of appropriate resources

    According to Glover and Kustere, within an organisation several department has work and management has allocating resources to them according to their requirement. Each one division has own role and responsibilities thus help to objectives effectively. Finance and human resources department both are work in resources allocation activities, fund manager provide money to each one section and HR executive has hire talented candidates for different division (Glover and Kusterer, 2016).

    Task 2

    P2 Several process of clients relationship management

    Customer relationship management: It can be define strategies, practices and technologies that are used by firm to evaluate and handle buyer interaction as well as information in long period of time. It is a administration of Ashtons responsibilities to develop action of plan in order to build strong positive brand image in customer's mind by which they are capable to enhance buyer satisfaction in long run.

    Assessment of consumer value: Marketing manager of the company has conducting research program to know needs and wants of consumers according they are develop goods and services in order to full fill their demand effectively. Through this, they are build strong positive brand image in purchaser mind as well as satisfaction (Hodges and et. al., 2015). By this, firm are gain higher market position as compare to their competitors and build healthy relationship with consumers in the same industry.

    Develop effective channel of communication: Management of Ashtons has develop strong communication channel by which they are able to connect with large number of clients at market place through this they achieve goals in limited period of time. There are two method of making channel vertical and horizontal, firm are used this mode according to their requirement by which make high market segmentation. Ashtons has used vertical mode of communication network to connect with large number of buyers with strong relationship.

    Digital marketing and E- mail: In modern era, Technology and digitalisation has help to boost performance effectively resulted firm are able to achieve competitive benefits. Through this, they are confident to attract large number of buyers toward their goods and services. By digital marketing, enterprise are share information about commodities with large users and make positive relationship with them thus help to achieve customers satisfaction in long period of time (Kitching, Hart and Wilson, 2015). Asthons has mailing massage on continues basis to keep touch with their buyers resulted clients feel connected and develop strong relationship.

    Apart from this, there are several other method are exist into market like special offer for particular purchaser, provide discount, gift vouchers, personal feedback and many more. Management has also make innovative ideas in order to develop healthy, strong relationship with all people thus help to enhance satisfaction and sales volume.

    P3 Small enterprise can develop transnational and identify benefits as well as drawback

    Transnational sales: Company has develop goods and services for different nation. For this, they are identify needs of target clients and produce commodities accordingly in order to full fill their demand effectively (Laukkanen and et. al., 2016). Through this, firm are produce goods to sell them in target nation industry by this they are able to achieve goals and objectives in limited period of time effectively.

    Small business can develop transnationally through internationalisation including various ways:

    Importing and exporting: The management of can bring its business named as Ashtons into international level by exporting and importing of its products and services for its targeted customers living across worldwide. For example, Ashtons is providing building on rent either for residential and official purpose. Thus, investing money in constructing buildings in other nations help them in achieving huge customer base. Whereas importing raw materials from other nations due to having low cost increases the revenue of company and decrease cost of business.

    Agents: Hiring Agents in other nations help Ashtons in reaching their business across worldwide. As the company engaged in providing house on rent thus hiring agents with an objective of influencing others and brings clients for them increases their customer base and revenue. The main role of agents is to communicate with the customers and influencing them to buy company's products according to their needs and requirements. This will increases market reach of Ashtons at global level.

    Strategic alliance: Making joint venture with small organisations operating in similar sector in nation where Ashtons wants to locate their business help them in their expansion within shorter time period. For example, expansion of business in India requires Ashtons to deal with local businesses operating in hosted nation so that the customers can be easily get and took interest in dealing with company in terms of buying their products and services.

    For example, Apple has manufacturing their some product components from China because of cheep manufacturing process thus help them to sell product at lower cost in developing nations and get higher profitability as well as market position. Transnational sales have their own advantage and disadvantage that has explain as follows:

    Benefits of small business activities:-

    Independence: Independence has develop power of taking decision with out asking others that called centralise decision making process. By this, they are able to increase sales and profitability in long period of time effectively. Management of the company has used transnational activities with independent decision power thus help to run business task in another nation effectively to achieve goals in limited period.

    Lifestyles: Owning small business as well as social enterprise has provide several lifestyles benefits like increase per person income, enhance living standard, offer economical product and many others. In this, management of firm has decide when and where they are target clients to work effectively (Osiyevskyy and Dewald, 2015). It is very important to understand and analyse consumers lifestyles and manufacturing commodities accordingly.

    Drawback of Transnational activities:-

    Financial risk: When firm are develop strategies for expending market then they want financial resources thus help them to run business activities in another nation effectively. It create neutral impact on company performance because some time management can not receive sufficient return on investment so that investor loss their fund that create negative impact on organisation image at market place.

    Time commitment: Some time expansion strategies can not work properly resulted it waste time and other resources of the company. So that it is a another one of the most important drawback of small business work.

    In customer relationship management process have four elements that are determine as follows:

    Understand market and consumers: Marketing manager of Asthons has conducting research to identify consumers needs and wants accordingly produce commodities as well as services in order to satisfied clients effectively (Ramalho, de Moura, A. P. and Cunha, 2015).

    Develop offers: They are develop offers to attract large number of individuals toward company goods which help to achieve target in limited period of time appropriately.

    Acquire audience: In order to get attention of large audience, Asthons has organising campaigning to create attraction through this they are able to build brand value at market place.

    Retain clients: Management has develop strategies to retain consumers with them which help to approaches them for repurchasing by providing strong after sales services.

    Buyers relationship management process in all stage

    According to Frese, Hass and Friedrich, firm are using four C's of customer relationship process in order to manage healthy relation with clients, 4C's are explain as follows:

    Cognize: Manager of firm has spread all information related to goods and services among consumers. Through this, Asthons has develop positive image in buyers mind resulted they are achieve target in limited period of time.

    Combine: In this, administration identify interaction between a clients, channel and user which help to build positive relation effectively (Spence, 2016).

    Connect: In this, factors utilization of sensibility to create appropriate interaction between suppliers, channels, customers, consumers, partners and many others to build healthy as well as strong relationship.

    Correlate: Correlate can be define as a series of transaction as well as interaction with buyers in order to create a healthy relationship between customers, user and channel etc.

    M4 Transnational operations activities that are used in internationalisation model

    Asthons has develop model of internationalisation to run business activities out site the home country or international level. It divided into four parts that are explain as follows:

    Knowledge opportunities: In transnational sales, manufacturing goods for particular market and that same product can not sell in another location due to specialisation. So that, firm have opportunities to fully utilisation of available opportunities to expend their market.

    Relationship commitment decision: By transnational activities, Asthons has develop policies in this includes their all commitment toward clients as well as employees. It help to build positive relationship among firm and consumers (Senderovitz, Klyver and Steffens, 2016).

    Network position: An organisation may expend their market segment in specific country thus help them to get sustainability in long period of time. In order to gain high network position in industry, they are develop product at economical cost so that attract large number of clients.

    Learning creating: In order to expend enterprise, organisation are are learn new things and implemented it at work place thus help to produce higher quality goods and services to buyers. It build positive image of the company in industry.

    Task 3

    P4 Annual itemised monthly cash flow forecasting which are shows fixed and variable cost

    When people or entrepreneur are open new business then they want money to run it activities effectively. In current market environment, small enterprise has start very fast and end with in a year due to lack of fund. So that, there are several financial sources are available, some are explain as follows:

    Bank loan: Government of United Kingdom has make special interest rate charges for small business so that through this enterprise are easily take loan from bank with low rates thus help them to run enterprise activities effectively in long period of time.

    Angel investor: Owner of small firm has find out investors those want to invest fund into new venture and make money. By this, they get money with less documentation that help to operate task and gain sustainability (Steingold, 2017).

    Leasing and hire purchase: Company has lease their capital asset and earn wealth in order to established their new venture effectively.

    Financial institutions: In UK, number of investor are available those are invest money on the behalf of others people in new venture. So that, small business unit has want to take loan form financial institutions and run firm appropriately.

    Budgeting and Forecasting: With in an organisation, there are several method of forecasting as well as budgeting and management select best one according to their needs, wants. Some of method are explain as follows:

    Forecasting method:

    • Qualitative and Quantitative method: In this method, marketing manager has gather information related to sales, profits, production, market trends etc. forecasting. It based on numerical data and predict future trends (Trevino, and Nelson, 2016). Through this, they are capable to identify future opportunities and develop strategies accordingly to get success in long period of time effectively.
    • Judgement forecasting method: Management has make specialist panel and provide them full information to make effective judgement. Thus help organisation to take right decision in order to identify upcoming direction to operate business.
    • Time series forecasting method: It includes smoothing, trend analysis, moving average and employ historical data etc. has time series forecasting by which firm are capable to achieve target in limited period of time.

    Budgeting method:

    • Activity based budgeting: Manager has divided all task into manageable activity accordingly assign budget to each one work. Through this they are completing all action effectively (Villamizar and et. al., 2016).
    • Zero based budgeting: It is opposite from traditional based budgeting. In this, manager identify all income and expenditure of future are assign fund accordingly.

    Profits & loss account, balance sheet and cash flow statement of the Ashtons:

    Cash distributed













    Total (£)

    Total revenues














    Direct material














    Direct labour




























    Selling and distribution














    Total variable expenses














    Fixed expenses














    Total cost use














    Surplus/ Deficit














    It is concluded from the above data that the Ashtons is having a surplus amount of 6392 £ in the future time, also company has total variable expenses of 63753 £ along with the total fixed cost is 24000 £. The total estimated revenue of the company is 94145 £.

    P5 Break-even analysis has apply in an organisation

    Break-even analysis: Break- even level has provide point where sales amount has equal to total cost both fixed and variable. In this point overall profitability should be zero and companies have in no profit and not loss situation. Management of Ashtons has used break-even technique to find out their profits level. Through this, they are able to implemented lean production techniques to get higher profits in long period of time.


    (Sources: Break even point, 2015)

    Administration of firm has faced several issues in running business activities like manufacturing work, forecasting, budgeting, customers retention and many more. So that, it reduce enterprise sustainability as well as quality of product by which they are able to run business activities appropriately (Winterhalter, Zeschky and Gassmann, 2016). By executing break-even model at work place, organisation are capable to manage wastage and get positive outcome to draw a valid result in an appropriate ways. For example, variable cost is £ 2 and fixed cost is £ 1500 selling price is 5 per unit so that break-even point is:

    Break -even point:- Fixed cost cost / selling cost – variable cost = 1500/ 5-2= 500 £.

    P6 Key financial statements

    In United Kingdom, it is compulsory for all organisation to prepare financial report in which they are includes several kind of financial statements like profits and loss account, trading account, balance sheet, cash flow statements, income statement.

    Financial statements: Management of the company has make annual report in which they are includes financial statements. Through this report enterprise are share information related to profits, expenses, income, loss, cash inflow and out flow etc. It help several individuals like investors, buyers, suppliers, government, banks etc. to take decision related to company.

    • Profits and loss account: In this account, firm share information related to their profits and loss of entire business activities. By which they are able to take future decision effectively. Important element of this statement are Sales, Cost of sales, Gross profit, Overheads, Net Profit etc.
    • Balance sheet: It is shows comparison between total liability and asset. Balance sheet help to identify firm outstanding liabilities and abilities to full fill that possession effectively. Through this, individual are analyse wealth of enterprise. For example a balance sheet of amazon company show below;


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    Balance sheet:



    Amount (£)





    Acc Receivable


    Fixed Assets


    - Gross


    - Acc Depreciation


    - Net Value






    Bank Loans


    Accounts Payable








    Retained Earnings






    • Cash flow statement
      : In which time how many cash are input or outputs with in an organisation. It mostly help management to take right decision related to fund and develop strategies to that they have able to optimum utilise available resources. The flow of cash is evaluated on the basis of three major elements as cash flow operating activity, investing activity and financing activity.

    Cash flow statement:



    Amount (£)






    From Operations



    From Investment





    From Operations



    From Investment





    • From the cash flow of the company it has been observed that total cash that organisation is having is 3500 £. According to above analysis it has been identified that organisation is in good situation because it is generating profits continuously (Javaid and Iqbal, 2017).
    • Income statement: What firm earn in duration of whole year has came under this section. Through this, they are shows their value at market place and provide growth ratio that shows firm are sustainability capabilities and effective management practices.


    Income statement:



    Amount (£)



    Cost of Goods Sold






    - Salary


    - Rent








    Taxes - 20%








     From the above statements it ash been analysed that Gross profits of Rowlinson Knitwear are 3500, total sales is 15000 and cost of sales is 11500. net profits of the company according to the income statements are 1240 which means the organisation is earning profits continuously. From the balance sheet of the organisation it has been analysed that organisation is having 3500 cash and total assets of the company are 19400. Organisation is having internal liabilities that include equities are 9240 and total liabilities of the company are 10160.

    Ratio analysis: Following ratios are calculated for the company:

    Name of ratio



    Liquidity ratio


    Current ratio

    Current assets/current liabilities


    Quick ratio

    Quick assets/current liabilities


    Profitability ratio


    Net profit ratio

    Net profit/sales*100


    Gross profit ratio

    Gross profit/sales*100


    From the above calculation it has been analysed that Rowlinson Knitwear is having good profitability and liquidity because the above mentioned ratios shows a good performance and position of the company.

    M5 Quantitative as well as Analytical techniques to provide detail about break-even and cash flow

    By using quantitative tools, firm has identify break-even point and cash flows which help in developing strategies and financial statements. Through this, company are capable to completing their all activities in appropriate ways. Analytical techniques has easily analysis organisation performance and productivity level as well as associated difficulties.

    D3 Critical evaluation of key financial statement

    According to Donnelly, Key financial statements has help organisation, financial institution, individuals, banks, government etc. to analysis firm market or financial position. All information like income, expenses, profits, loss, cash inflow, outflow etc. which are available in annual report has help different individual to take decision related to investment, management strategies etc.

    Task 4

    P7 Important legislation and regulation implemented in small scale organisation

    In United Kingdom, government of the nation has develop several law in order to manage and control organisation activities, because some time they are not working unethical. There are explain some important legislation which implemented in small business are explain as follows:

    Equality law: Government of UK has develop law that no one company use discrimination at their work place or at time of hiring on the basis of colour, age, education, religion, gender etc. Asthons has recruit candidates without discrimination in order to follow all rule and regulation in appropriate manner (Equality act, 2013).

    Minimum wages act: It is compulsory for all organisation to provide minimum salary to their employees. Through this they are manage all workers in an significant ways. Management of Asthons has implemented this act with in institution in order to enhance employee's satisfaction resulted overall worked are completed on time (Minimum wages act, 2019).

    Healthy and safety act: UK government has take action in safety or security of labour at work place. Asthons has developing healthy working environment for their staff members that enhance their performance as well as productivity. Through this activity, enterprise are capable to build motivation, self confidence, moral, loyalty toward business etc. (Crane and Matten, 2016).

    M6 Implications of key legislation

    All these are executed with in company and they are provide responsibility and roles, holding employees health, understanding of employees behavioural, motivation factor, performance and productivity (Burns, 2016). So that, each one companies has executed this all regulation in their work place in order to reduce conflicts with government as well as employees.

    D4 Key regulations affected on small business

    There are several type of laws that develop by government of United Kingdom are discriminate law, minimum salary act, safe and healthy working environment, maternity law and many more. All these are implemented by all small organisation, by this they are able to achieve goals and objectives in given time frame.


    From the above report it is concluded that small business has lot of opportunities in United Kingdom in order to achieve target market effectively. In United Kingdom approx 51 % of total private firm are small in nature and their contribution into economy is very high as compare to other kind of enterprise. Ashtose has provide finance to their clients to buyer and rent their services thus help them to attract large number of consumers toward organisation goods and work.

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